Electric Utility Resource Planning

In 2012, using easy-to-understand text and examples, the first edition of this book explained how electric utilities “work,” and how they plan (or should plan) for the future, by: "Creating" a hypothetical electric utility. Explaining how (and why) this utility will operate its system of generating units. Guiding readers through a planning analysis for the utility, examining various resource options (solar, new gas-fueled generation, and conservation). Introducing four Fundamental Principles of Resource Planning that should guide utilities as they plan for the future. The first edition material, with significant updates, now appears as Part I of the second edition of this book. Part II of this book then presents six all-new chapters that address the challenges (and opportunities) of moving toward a zero-carbon future. Using the same hypothetical utility, with its new goal to utilize solar and batteries to serve 100% of its customers’ energy with zero carbon emissions by a future “target”year, Part II of this book addresses many subjects, including: The enormous amount of MW of new solar and batteries the utility will need to add Why certain characteristics of new solar and battery additions change as increasing amounts of these resources are added In the years prior to achieving its zero-carbon goal, how the hourly operation of the utility’s existing fossil-fueled generators, plus the new solar, will change (and why the stability of the transmission grid will be challenged) With this second edition, author Dr. Steven Sim again applies the experience and insights he gained from more than 30 years of resource planning for Florida Power & Light (FPL). As one of the largest electric utilities in the United States, FPL has faced a multitude of resource planning challenges, including how to get to zero carbon. During this time period, Dr. Sim performed and directed thousands of analyses designed to address these challenges. He also served as an expert witness in dozens of regulatory hearings, addressing both the economics of resource options and the non-economic impacts (air emissions, system reliability, fuel usage, etc.) associated with these options.

Electric Utility Resource Planning: Past, Present and Future covers the balance of renewable costs, energy storage, and flexible backstop mechanisms needed in electric utility resource planning. In addition, it covers the optimization of planning methodologies and market design. The book argues that net load, ramping and volatility concerns associated with renewables call into question the validity of almost a century of planning approaches. Finally, it suggests that accounting for flexibility helps optimize the efficiency of the entire fleet of assets, minimizing costs and CO2 generation simultaneously, concluding that a flexible, independent backstop mechanism is needed, regardless of renewables or storage. Case studies provide a mix of hypothetical "what if" scenarios and analyses of real-life utility portfolios drawn from international examples. Examines how resource planners and policy specialists can plan to incorporate renewable generation technologies, thus uniting considerations of technology, methodology, business and policy Focuses on the reality of long-term decision-making and planning processes in working utilities Reviews novel approaches towards resource planning that yield lower costs and CO2 Emphasizes the need for flexible backstop mechanisms to maintain reliability

Since the mid-seventies, electric utilities were faced with escalating construction costs, growing environmental plus siting constraints and increasing uncertainty in demand forecasting. To cope with the increasing demand for energy services, utilities can either invest in supply-side options (new generation, transmission and distribution facilities) or in demand-side options. Demand-side options include, policies, programmes, innovative pricing schemes and high-efficiency end-use equipment (equipment providing the same or better level of services but using less energy or peak power). Recent experience in both North America and Europe show that demand-side options are usually cheaper and less damaging from the environmental point of view, and also their potential can be tapped in a shorter term than other supply-side options. This workshop was directed at the discussion and analysis of cost-effective methodologies to achieve the supply of electric energy services at minimum cost and minimum environmental impact. The programme included new developments in power planning models which can integrate both supply-side and demand-side actions. Quantitative assessments of the environmental impact of different supply-demand strategies were analyzed. Planning models which deal with uncertainty and use multicriteria approaches were presented. Case studies and experiments with, innovative concepts carried out by utilities in several countries were discussed. Load modelling and evaluation of demad-side programmes was analyzed. Additionally, the potential for electricity savings in the industrial, commercial and residential sectors was presented. New research directions covering planning models, programmes and end-use technologies were identified.

Most people—including many legislators, regulators, and other decision makers in the electric utility industry—have misconceptions about how electric utilities really "work" and plan for the future. This lack of understanding can lead to poorly informed decisions and policies that directly affect the choices utilities must make. Using easy-to-understand text and examples, Electric Utility Resource Planning: Economics, Reliability, and Decision-Making clarifies how utilities operate their systems and prepare for the future. This explanation will show readers that both expected and counterintuitive results can occur (i.e., conservation might result in higher air emissions, or lowering costs could lead to higher electric rates). Taking readers step by step through this process, the book (in the following order): "Creates" a hypothetical utility Explains how and why a utility operates its system of generating units Discusses the planning methods that a utility would (or should) use Guides readers through each stage of a planning analysis for the hypothetical utility, examining various resource options (conservation, new power plants, and solar) In addition, the author introduces four Fundamental Principles of Resource Planning that should guide utilities. He also offers opinions on how certain trends in utility regulation and legislation can hinder utility planners’ efforts to identify and select the best resources for the utility’s customers. With this book, author Dr. Steven Sim applies his experience and insights from more than two decades of resource planning for Florida Power and Light (FPL). As one of the largest utilities in the United States, FPL has faced a multitude of resource planning challenges, and Dr. Sim has performed and supervised thousands of analyses designed to meet these obstacles. He has also served as an FPL witness in regulatory hearings on a wide variety of topics, ranging from the economic implications of nuclear, conservation, coal, gas, and other resource options, to the non-economic impacts (air emissions, fuel usage, system reliability, etc.) they present.

Because the power industry is anticipating greatly increased generating capacity requirements in the 1990s, political controversy over electricity demand and supply is likely to return to--and perhaps surpass--the level of rancor experienced during the 1970s. Fortunately, a sizable number of utility companies have come to believe that destructive c